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private exchange program - TPA opportunity?


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Disclaimer: I'm a pension administrator at a pension consulting firm, and I'm being asked to join the Dark Side of employee health benefits. :) So I may not be getting all the terms or concepts right; please feel free to correct me.

I got a call from an insurance broker who tried to explain to me that private health insurance exchanges are being set up that will allow the participants to pay for part of their insurance on a "defined contribution" basis. I was his first thought when he saw those words, which is nice, and he wanted to know if we were going to jump into this arena. Presumably, there will be documents to write at the front end, and most likely some kind of annual reporting each year.

I have a feeling this is not "defined contribution" the way I know it - 401(k), profit sharing, etc. And I don't see how the two are related except that they share terminology (which the IRS does all the time). Can anyone point me to someplace I can get more information on this, or just explain to me that I'm meddling in affairs that may be beyond my bailiwick (which I'm not against expanding)? Thanks.

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I am NOT an expert on this topic. I am also a pension administrator, working for a benefits firm that is much more involved in health benefits than retirement plans. Since the new health care law has passed I've been getting lots of questions from our health folks about the concepts of controlled groups and affiliated service groups. Apparently there is going to be more similarity between the two worlds than there used to be. How that might translate into business opportunities, I have no idea.

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